A Nexen worker walks along the company’s Long Lake thermal oilsands project in northeastern Alberta. Investment by foreign firms such as CNOOC raises productivity, and hence the living standards of Canadian families, says Liberal leadership hopeful Justin Trudeau.Courtesy
/ Supplied

I opened my campaign last month with the argument that, if the Liberal Party is to become a positive force for change in Canada, we need to give voice to the aspirations of our middle class.

Personal income for middle-class Canadians has stagnated for more than a generation. This deeply troubling development is masked by a rise in family income, due to the entry of a new generation of well-educated, hard-working women into the workforce. While this phenomenon is overwhelmingly positive, we must be clear-eyed in understanding that it is a one-time benefit.

So, we’re left with the vexing question: where will the next wave of growth for the middle class come from?

Public and private investment in science, and the innovation and productivity growth it spurs will unquestionably play a major role. A renewed national commitment to build the world’s most educated citizenry is essential, as is a more strategic approach to our natural resources. We also need to keep costs competitive and make smart infrastructure investments.

But all of these, while necessary, will be insufficient to provide the opportunities we want for the middle class unless we get one big thing right.

Canada’s economic prospects have always been tied to trade. We are a small market that must export and attract investment to create jobs and growth, and import to keep costs down and provide choice for middle-class families.

For much of our history, the only trading relationship that mattered was with the United States. From Laurier to Mulroney, it defined our politics in watershed elections that bookended the last century, and inflamed passionate debates about national identity throughout. As we grew more confident, Canadians arrived at the conclusion, supported by the evidence, that openness to trade is good for us. It expands our horizons, as well as our national wealth.

That was the 20th century. The 21st century is different. Trade remains a paramount objective, but we can no longer rely on the U.S. alone to drive our growth.

I am not one of those who believe the U.S. is in serious decline. Our relationship with our southern neighbour remains our most important, but we cannot afford to miss vital opportunities elsewhere. By 2030, two-thirds of the planet’s middle class will be in Asia. How we define and manage our relationship with Asian economies to play a Canadian role in fuelling that growth will matter as much to the Canadian middle class in this century as our relationship with the U.S. did in the last.

So how are we doing? Canada benefited from being the first western country to recognize the People’s Republic of China, but we have lost ground recently. The Conservatives kicked off their stewardship of the relationship with unhelpful sabre-rattling, followed by a stubborn silence. Recently, they have made attempts at courtship, but China’s leadership has a long memory. Influence and trust is built through consistent, constructive engagement.

Further, the Conservatives have developed their approach to Asia, such as it is, behind closed doors. This is a mistake. Where is the leadership to explain to Canadians why this relationship is so important, to engage Canadians in the conversation, to make us aware of the opportunities?

Because we have failed to make the case for trade, Canadians are understandably anxious. Because we failed to ensure that the middle class participates in the growth created by trade, support for it has recently broken down.

The twin issues of the Asian investment in the oilsands and the Northern Gateway Pipeline must be seen in this light. In the absence of a clear, public strategy, with long-term goals and positive outcomes fully aired, debated and understood, Canadians see these issues as one-offs. The government has failed to provide the context, to make the positive case for Asia. It is therefore as difficult to reject bad ideas like the Northern Gateway as it is to approve good opportunities like the CNOOC and Petronas deals.

Why is the CNOOC-Nexen deal good for Canada? Because Chinese and other foreign investors will create middle-class Canadian jobs. Foreign investment raises productivity, and hence the living standards of Canadian families. More fundamentally, it is in Canada’s interest to broaden and deepen our relationship with the world’s second-largest economy.

Of course there should be conditions attached. All foreign investors must obey the letter and the spirit of Canadian labour, environment, corporate governance and immigration laws. In certain sectors, national security concerns will be real. However, in the CNOOC case, Chinese ownership of three per cent of oilsands leases hardly constitutes a national security issue.

Most important, the big picture isn’t about CNOOC or Petronas, but the many opportunities like them that will follow in their footsteps. China is scanning the world for acquisitions like a shopper in a grocery store. Just a decade ago, China’s outward foreign direct investment was negligible; today it approaches $100 billion. Canada has perhaps more potential to capitalize on this context than any other country. From minerals to energy, from education expertise to construction, we have a lot of what China needs.

We should be creative when thinking about what a trade deal with China could look like. For example, according to (global management consulting firm) McKinsey and Company, China will have 221 cities of more than a million people by 2025 (up from 160 today). Asia will invest trillions in infrastructure over that time. That growth requires exactly the kind of expertise we have in Canada. What if our goal was to become Asia’s designers and builders of livable cities? What if we got our world-class financial institutions and pension funds together with our world-class engineering and construction industries to secure a leadership role for Canada in Asia’s growth?

This is one idea. There are many more. There is a leadership opportunity in Asia that could create thousands of jobs here at home, and a generation of Canadian wealth. In order to take it, we need courage and vision.

We deceive ourselves by thinking that trade with Asia can be squeezed into the 20th-century mould. China, for one, sets its own rules and will continue to do so because it can. China has a game plan. There is nothing inherently sinister about that. They have needs and the world has resources to meet those needs. We Canadians have more of those resources — and therefore more leverage — than any nation on Earth.

The Conservatives are missing the boat. Their erratic approach and secretive behaviour inspire the opposite of confidence among potential investors and Canadians alike.

In the end, this is more about our core values than the pure economic value of rising middle-class income. If we really believe in a Canada built on equality of opportunity, upward mobility, and expanded individual freedom and choice, then we must get this right. Real leadership means fighting for, not pandering to, middle-class Canadians.

This can only happen if we are direct with Canadians and ready to trust them. If we expect our citizens to be open to the world, the least their government can do is be open with them.

Justin Trudeau is a candidate for the leadership of the Liberal Party of Canada.

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OpEd: CNOOC-Nexen deal is good for Canada, says Justin Trudeau

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